HRA Report Shows Overspend and Possible Fraud Occurred Despite Many Warnings

Published on: 23 Jan, 2025
Updated on: 23 Jan, 2025

By Martin Giles

Warning after warning, red flag after red flag, were ignored by senior managers at Guildford Borough Council allowing a £multi-million overspend and possible fraudulent misuse of its Housing Revenue Account budget.

An investigation report, conducted by law firm Heminsley, described by a councillor as “shocking”, listed 13 separate red flags which should have indicated to senior managers that there was a problem with the way £24.2 million allocated for housing maintenance in February 2022 was being spent.

At an extraordinary full council meeting last night (January 22), GBC decided that the report, which names officers who knew or should have known things were going wrong, should be made public because of the level of legitimate public interest.

But although the report gives in detail what happened, further action stemming from the report is not envisaged as GBC considers the necessary corrective action was taken in the wake of the earlier SOLACE report.

See also: Council Leader Apologises Following Publication of Damning Report on GBC

One of the red flags was a whistleblower’s warning which commenced in September 2022, but although this was investigated and reported to the Corporate Management Board it seems concerns were initially, at least, dismissed.

It was only a year later, in September 2023, that action was taken with the suspension of two permanent officers involved in procurement and five temporary officers who worked with contractors, one of whom was briefly arrested in 2024.

Fifteen senior managers are identified as “key individuals” and named. But most attention is focused on the roles of those at the top: Tom Horwood, Joint CEO, Ian Doyle, Joint Director of Service Delivery, and Annie Righton, Joint Strategic Director of Community & Wellbeing. Tom Horwood resigned for personal reasons in early 2024 and Directors Doyle and Righton both agreed to “step back” from their duties in February 2024 before resigning with a financial settlement. The amounts have not been made public.

See also: Senior Directors Step Back Following New Report on Fraud & Overspend Investigation

Financial settlements were also given, we understand, to the two permanent officers suspended – “Officer A” and Officer “B” in the report who worked on contract management.

Cllr Philip Brooker

Practically all of the council officers involved with relevant management responsibility have also now left GBC.

There is little mention of councillor awareness or involvement in the whole affair and the councillors questioned don’t appear to have been asked about their scrutiny role. During the debate on the report, the leader of the Conservative opposition at GBC, Cllr Philip Brooker, did say that the leader of the council should consider her position.

R4GV group leader Joss Bigmore

Cllr Joss Bigmore (R4GV, Merrow), who until May 2023 was deputy leader and lead councillor for finance, did admit to feeling responsible and wished, in hindsight, he had asked more questions.

Contracts were issued for housing maintenance work to make the GBC estate compliant with regulations covering electrical safety (through Electrical Inspection Compliance Reports) as well as asbestos and fire safety. Additionally a “Whole House” contract was agreed under which bathrooms and kitchens were brought up to standard after, what some say, was a period of neglect.

As well as overspending against approved limits, a whistleblower alleged that not all invoices were being properly raised and were being paid for works that might not have been necessary or work that was not carried out or completed.

It is this area that is subject of an ongoing police investigation by the South East Regional Organised Crime Unit (SEROCU).

Council officers interviewed by Heminsley gave various reasons in mitigation for any oversight. Included were claims that their roles were too large and complicated, that there were wider governance issues and IT system weaknesses, that staff cutbacks under the Future Guildford programme had played a part, and that the collaboration with Waverley, according to former CEO Tom Horwood, placed a “fundamental strain on senior managers”.

GBC say they are unable to even estimate the amount of the £24.2 million allocation that was taken fraudulently.

Cllr Julia McShane

Following Wednesday’s council meeting, the leader of Guildford Borough Council, Julia McShane (Lib Dem, Westborough), said: “We recognise the importance of this investigation to understand what went wrong in the past and make meaningful changes to ensure a stronger future.

“Our residents deserve a council that delivers best value for them. Our priority is to do the right thing, not the easy thing, for the benefit of our residents and businesses.

“With the investigation now complete, Guildford Borough Council continues to be committed to ensuring future transparency, accountability, and effective governance.”

CEO Pedro Wrobel

CEO Pedro Wrobel said: “We need to understand what went wrong in the past to enable us to move forward with confidence. This report is the last piece of the puzzle.

“I am now confident that our robust improvement plan addresses all the issues raised, and we will continue to focus on delivering this, to give our residents and businesses the brilliant level of service they deserve.”

Reacting this morning, the leader of Waverley Council’s Conservative opposition, Jane Austin, was scathing in her criticism. She said: “This report is truly shocking. It outlines a catalogue of failures, and clearly states that senior managers entrusted to run both of our Councils have, on the balance of probabilities, not acted in the way they could or should have been expected to.

Cllr Jane Austin

“In 2025 we are still dealing with major upheaval and unwanted
consequences of the Lib Dems’ hasty 2021 decision to ‘collaborate’ the two
councils, a decision made without proper research or even a business
case.

“Waverley residents are now needlessly drawn into and damaged by the
serious failings of a completely different Council’s making. Our experience
is that Guildford’s financial and governance issues have been a serious
distraction for officers – to Waverley’s detriment. Waverley BC is even
having to pay a 50 per cent share of Guildford’s investigation costs in respect of
this alleged fraud.

“The worst tragedy of this situation is that £millions which should have been spent improving Guildford residents’ lives and homes is now gone. I only hope justice is served via the ongoing criminal investigation.”

Cllr Carole Cockburn

Cllr Carole Cockburn (Con, Farnham Bourne) gave this reaction to the report: “Waverley residents have been placed in this situation because of the Lib-Dem organised collaboration of Guildford and Waverley, something we have never supported as we couldn’t see any benefit to residents.

“But what has transpired is infinitely worse than we anticipated – we are tied to a council still trying to recover from serious financial and governance failures. The collaboration itself is even cited as a contributing reason for the failures  – including by the former CEO himself – which led to the alleged fraud. Waverley deserves better.”

See also: Letter – GBC Improvement Work Was Hampered By Its Culture

There will be more coverage of this story. Please check back.

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